Transcript DEMAND - University of Miami

CONDUCT OF
LARGE PRIVATE
CIVIL LAWSUITS
Conduct of Large Private Civil Lawsuits
• Primary Focus: Settlement
• Secondary Focus: Summary
Judgment
Order of Proceedings
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Preliminary Negotiations
Complaint
Motion to Dismiss Part or All
Investigation & Discovery
Summary Judgment Motions
Trial Prep/Negotiations
Investigation & Discovery:
Interactive Process
• Legal Research  Set of Relevant Facts
to Investigate
• Discovery of Facts  More Detailed
Legal Qs to Research
• Theories Change as Get More Info
Investigation & Discovery: Goals
• Defendant
– Limit Info Going to Plaintiff
– Identify D Theory of Case (& Support)
– Identify Evidence Key to P Theory of Case
• Plaintiff: Find Evidence Sufficient to
Survive Summary Judgment
– Evidence Consistent w P Theory
– Evidence Inconsistent w D Theory
Investigation & Discovery:
Finding Evidence
• Witness Interviews
• Early Interrogatories
– Contentions
– I.D. Witnesses & Documents
• Document Review (Most Important)
• Depositions
• Later Interrogatories: What Evidence
Supports Claims
Order of Proceedings
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Preliminary Negotiations
Complaint
Motion to Dismiss Part or All
Investigation & Discovery
Summary Judgment Motions
Trial Prep/Negotiations
THEMES OF THIS COURSE
1. Power of Attorneys & Legal Academics
to Change the Law
HISTORICAL TRENDS
• 1945-75: Anti-Big Business Ideology
• 1975-92: “Antitrust Revolution”
• 1992-2000: Line-Drawing and Some
Counter-Revolution
• 2001
: ???
THEMES OF THIS COURSE
1. Power of Attorneys & Legal Academics to
Change the Law
2. Use of Economics in Legal Argument
THEMES OF THIS COURSE
1. Power of Attorneys & Legal Academics to
Change the Law
2. Use of Economics in Legal Argument
3. Conducting Complex Civil Litigation
THEMES OF THIS COURSE
1. Power of Attorneys & Legal Academics to
Change the Law
2. Use of Economics in Legal Argument
3. Conducting Complex Civil Litigation
ATTORNEYS MATTER A LOT
INTRODUCTION TO
THE ECONOMICS
OF ANTITRUST
ASSUMPTIONS OF
CLASSICAL ECONOMICS
• PEOPLE ACT RATIONALLY TO
MAXIMIZE THEIR OWN
INTERESTS
ASSUMPTIONS OF
CLASSICAL ECONOMICS
• PEOPLE ACT RATIONALLY TO
MAXIMIZE THEIR OWN INTERESTS
• RESOURCES MOVE TO MOST
VALUABLE USE IF VOLUNTARY
EXCHANGE PERMITTED
“VALUE”
MEASURED BY AGGREGATE
CONSUMER WILLINGNESS TO
PAY FOR THINGS
“EFFICIENCY”
EXPLOITING ECONOMIC
RESOURCES TO MAXIMIZE
“VALUE”
Given these definitions …
• Voluntary transactions are “efficient”
Given these definitions …
• Voluntary transactions are “efficient”
• Free market is “efficient”
– allows sequences of transactions
– resources end up w those who most value them
Given these definitions …
• Voluntary transactions are “efficient”
• Free market is “efficient”
– allows sequences of transactions
– resources end up w those who most value them
• Interference with market by government or
cartel is “inefficient”
PROBLEMS WITH
ASSUMPTIONS
• DEFINITION OF “VALUE”
• PEOPLE OFTEN IRRATIONAL
PROBLEMS WITH
ASSUMPTIONS
• DEFINITION OF “VALUE”
–CONSUMER CULTURE
–DEPENDS ON INCOME
DISTRIBUTION
–MORE $ = MORE VOTES
PROBLEMS WITH
ASSUMPTIONS
• PEOPLE OFTEN IRRATIONAL
–OFTEN APPEAR TO ACT
AGAINST SELF-INTEREST
–OFTEN PERCEIVE SELVES
ACTING AGAINST SELFINTEREST
PROBLEMS WITH ASSUMPTIONS
• Raise Qs About Normative Use of Theory
– Claims that results of comp. market always
desirable
– Claims that interference w comp. market
always bad
PROBLEMS WITH ASSUMPTIONS
• Raise Qs About Normative Use of Theory
• Theory Often Describes World Pretty
Well
PROBLEMS WITH ASSUMPTIONS
• Raise Qs About Normative Use of Theory
• Theory Often Describes World Pretty
Well
• ME: Works Best if Addressing Basic
Consumer Items
DEMAND CURVE:
GENERALLY BUY MORE OF
GOOD THE LESS IT COSTS
DEMAND
Demand
30
25
P
20
P
15
10
5
0
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Q
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DEMAND CURVE:
GENERALLY BUY MORE OF GOOD
THE LESS IT COSTS:
• SUBSTITUTION EFFECT
• INCOME EFFECT
DEMAND CURVE:
GENERALLY BUY MORE OF GOOD
THE LESS IT COSTS
• SUBSTITUTION EFFECT: AS
GOOD BECOMES CHEAPER, BUY
IT INSTEAD OF ALTERNATIVES
• INCOME EFFECT
DEMAND CURVE:
GENERALLY BUY MORE OF GOOD
THE LESS IT COSTS
• SUBSTITUTION EFFECT
• INCOME EFFECT: AS GOOD
BECOMES CHEAPER,
PURCHASING POWER
INCREASES, SO BUY MORE
DEMAND CURVE:
GENERALLY BY MORE OF GOOD
THE LESS IT COSTS
EXCEPTIONS (RARE):
• INFERIOR GOODS
• LUXURY GOODS
DEMAND CURVE:
GENERALLY BY MORE OF GOOD
THE LESS IT COSTS
EXCEPTIONS:
• INFERIOR GOODS: GOODS
YOU BUY MORE OF, THE
LESS $ YOU HAVE
• LUXURY GOODS
DEMAND CURVE:
GENERALLY BY MORE OF GOOD
THE LESS IT COSTS
EXCEPTIONS:
• INFERIOR GOODS
• LUXURY GOODS: GOODS
YOU BUY BECAUSE OF THE
HIGH PRICE
FACTORS AFFECTING
DEMAND
• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES
FACTORS AFFECTING
DEMAND
• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES
FACTORS AFFECTING
DEMAND
• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY
GOODS
• PRICE OF SUBSTITUTES
FACTORS AFFECTING
DEMAND
• PERSONAL TASTE
• INCOME
• PRICE OF COMPLEMENTARY GOODS
• PRICE OF SUBSTITUTES
DEMAND
Demand
30
25
P
20
P
15
10
5
0
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Q
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DEMAND
Demand
30
25
P
20
P
15
10
5
0
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Q
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DEMAND
Demand
30
25
P
20
P
15
10
5
0
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Q
9
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TYPES OF PRODUCER
COSTS
• FIXED v.VARIABLE COSTS
• TOTAL v. AVERAGE COSTS
• MARGINAL COST
FIXED v. VARIABLE COSTS
• FIXED COSTS: DO NOT
VARY IN SHORT RUN
• VARIABLE COSTS
FIXED v. VARIABLE COSTS
• FIXED COSTS: DO NOT VARY IN
SHORT RUN
• VARIABLE COSTS: VARY WITH
LEVEL OF PRODUCTION
TOTAL v. AVERAGE COST
• TOTAL COST: ALL COSTS
ASSOCIATED WITH PRODUCT
LINE
• AVERAGE COST
TOTAL v. AVERAGE COST
• TOTAL COST: ALL COSTS
ASSOCIATED WITH PRODUCT LINE
• AVERAGE COST: MEAN COST PER
ITEM PRODUCED
TOTAL v. AVERAGE COST
• TOTAL COST: ALL COSTS
ASSOCIATED WITH PRODUCT LINE
• AVERAGE COST: MEAN COST PER
ITEM PRODUCED
– AVERAGE TOTAL COST
– AVERAGE VARIABLE COST
MARGINAL COST =
ADDITIONAL COST OF
PRODUCING
ONE MORE UNIT
ALL COSTS INCLUDE
“NORMAL” PROFIT
SUPPLY CURVE =
MARGINAL COST CURVE
FOR INDUSTRY AS A
WHOLE
SUPPLY & DEMAND
Demand
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20
P
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Q
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FACTORS AFFECTING
SUPPLY CURVE
• TECHNOLOGICAL
CHANGE
FACTORS AFFECTING
SUPPLY CURVE
• TECHNOLOGICAL CHANGE
• INPUT PRICES
SUPPLY & DEMAND
Demand
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P
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P
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Q
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PRODUCERS’ GOAL
MARGINAL REVENUE =
MARGINAL COST
PRODUCERS’ GOAL
IN COMPETITIVE MARKET
MARGINAL REVENUE =
PRICE =
MARGINAL COST
SUPPLY & DEMAND
Demand
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25
P
20
P
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10
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Q
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OPTIMUM CONDITIONS FOR
COMPETITIVE EQUILIBRIUM
• FUNGIBLE PRODUCT
• SUPPLIERS CAN’T AFFECT EACH
OTHERS PRICING/OUTPUT
• MOBILITY/EQUALITY OF RESOURCE
AVAILABILITY
• GOOD INFORMATION/LOW
TRANSACTION COSTS
OPTIMUM CONDITIONS FOR
COMPETITIVE EQUILIBRIUM
• FUNGIBLE PRODUCT
• SUPPLIERS CAN’T AFFECT EACH
OTHERS PRICING/OUTPUT
• MOBILITY/EQUALITY OF RESOURCE
AVAILABILITY
• GOOD INFORMATION/LOW
TRANSACTION COSTS
OPTIMUM CONDITIONS FOR
COMPETITIVE EQUILIBRIUM
• FUNGIBLE PRODUCT
• SUPPLIERS CAN’T AFFECT EACH
OTHERS PRICING/OUTPUT
• MOBILITY/EQUALITY OF RESOURCE
AVAILABILITY
• GOOD INFORMATION/LOW
TRANSACTION COSTS
OPTIMUM CONDITIONS FOR
COMPETITIVE EQUILIBRIUM
• FUNGIBLE PRODUCT
• SUPPLIERS CAN’T AFFECT EACH
OTHERS PRICING/OUTPUT
• MOBILITY/EQUALITY OF
RESOURCE AVAILABILITY
• GOOD INFORMATION/LOW
TRANSACTION COSTS
OPTIMUM CONDITIONS FOR
COMPETITIVE EQUILIBRIUM
• FUNGIBLE PRODUCT
• SUPPLIERS CAN’T AFFECT EACH
OTHERS PRICING/OUTPUT
• MOBILITY/EQUALITY OF RESOURCE
AVAILABILITY
• GOOD INFORMATION/LOW
TRANSACTION COSTS